FY12 Budget Process Continues

This past week, the Reading School Committee held two meetings to discuss the Superintendent’s Budget.  On Monday evening, the School Committee heard the overview of the entire budget and a presentation on the administration cost center.  On Thursday evening, presentations were made on the Regular Day and Special Education budgets.  Several excellent questions were asked by the School Committee.  The answers to those questions are posted at the document located here

 The remaining budget meetings are as follows:
 
 

 

  • January 20-The School Committee will be discussing the Other (Health Services, Extra-curricular, Athletics, Technology) and Facilities/Maintenance cost centers.
  •  January 24-Public Hearing on FY12 Budget
  •  January 31-Final Vote on FY12 Budget

We encourage you to attend these meetings and participate in the budget process.

The information below gives you a brief picture of the FY12 budget.  We encourage you to review the entire Superintendent’s Recommended budget here.  If you have any questions during the process, please do not hesitate to contact the Superintendent’s office at 781-944-5800 or jdoherty@reading.k12.ma.us.

Town Revenue and Expenses

The majority of the town’s revenues, of course, come from the local property tax levy as well as excise taxes. State aid is a major source of revenue as are state and federal grants. Lesser amounts are received through local permits and fees. In Fiscal Year 2012, the town is predicting an increase of $1.2 million in local revenues but a decrease of $1.6 million in federal and state revenues for a net projected decrease of $0.4 million.

The majority of accommodated costs, with the exception of energy and utilities, and special education tuitions are also projected to increase and, unfortunately, at a rate that outpaces the growth in revenue. Health insurance rates are projected to increase 7% with enrollment growth requiring an additional 3% increase in funding.

As a result of this shortfall, the town’s Finance Committee is recommending the use of up to $1.5 million from cash reserves to help stabilize the fiscal year 2012 budget. Even with this infusion of free cash, the remaining non-accommodated budgets appear to require a 0.5% reduction in order to balance. For the school department, that translates to a $385,485 reduction below the FY2011 budget.

School Department Budget Challenges

The school department faces a number of budget challenges in the upcoming year. Employee salaries comprise over 77% of the school’s budget. All of the school department’s collective bargaining agreements are due to expire at the close of the current school year and negotiations for successor agreements have only just begun. In addition to the expiration of collective bargaining agreements, contracts for transportation (regular education, athletics, and extracurricular buses) and substitute teachers are also expiring. Also, photocopier leases will need to be re-negotiated prior to the start of the next school year as well. There will also be curriculum needs as well that will focus on the implementation of the new anti-bullying law and the transition of our curriculum from the current Massachusetts State Frameworks to the new Common Core of Learning.

As mentioned earlier, the two bright spots on the FY2012 horizon are special education tuition costs and energy expenditures. Special education tuitions are anticipated to decrease slightly next year as a result of the transition of students out of some of the more costly placements. Decreases of over 10% in energy consumption are anticipated as a result of the extensive investment that the community has made in energy conservation measures throughout all school and town buildings. Furthermore, due to excess natural gas reserves brought about by new gas recovery technologies brought on-line over the last two years, natural gas prices are also on the decline. Our current natural gas contract is due to expire at the end of October 2011 and we are anticipating gas prices will be 20% below what we are currently paying.

Despite the cost savings in these two areas, however, the increase needed to fund a level service budget is projected to be just over $1.0 million. A level service budget would allow the school department to provide the same level of services to our students as we are providing in the current school year. It would allow us to maintain the staffing that is currently funded through the soon-to-expire federal stimulus grants as well as other federal grants that are projected to be reduced in the next fiscal year or which are not anticipated to increase sufficiently to pay higher salary costs. In total, this translates to 8.5 FTE employees. Also included in the level service budget is the addition of 2.8 special education teaching staff to ensure that current caseloads for existing staff do not increase and that the needs of a rapidly increasing population of students suffering from social and emotional disabilities are adequately addressed.

Fulfilling the needs of the school department given the available resources of the community will be very difficult in fiscal year 2012. Already, over the past several years, the gap between per pupil spending in Reading and the state average spending has been widening as the chart below indicates. That gap has increased from $1,162 per pupil in FY07 to $1,936 per pupil in FY10, a gap of $774 per pupil or 7.3% of our total per pupil amount. If the school budget were to be level funded or decrease in FY2012, this gap would likely increase even further. 
 
 
 Superintendent’s Recommended Budget
 
The Superintendent’s Recommended budget contains three different budget scenarios for FY12, a level services budget, a level funded budget, and a -.5% reduction budget.  The level services budget would require an increase of 2.7% over fiscal year 2011 or just over $1,000,000.  This scenario is the least likely given the current budget picture.  The level funded budget requests the same total appropriation as that received for fiscal year 2011 or $36,390,308. This again may not be a realistic scenario.  Finally, the -.5% reduction budget is a budget that is being developed by both Town and Schools at the request of the Reading Finance Committee.  This budget will be $385,000 less than we are currently spending in FY11.
 
In summary, in order to reach a level funded budget, the following reductions would need to be made from a level service budget:

 

  • Increase Offsets by $125,000
  • Reduce School Supply & Material Budgets by $100,000
  • Eliminate 1.5 Support Staff Positions at a cost of $50,000
  • Reduce Administrator Salaries by $20,000
  • Eliminate After School Fitness Center at a cost of $20,000
  • Reduce Salary Increases at a cost of $685,000  

This level funded budget represents a $1,000,000 reduction from the level service budget.  If further reductions were necessary to get from the Level Funded Budget to a -0.5% Budget, additional cuts totaling just over $385,000 would need to be made. The proposed cuts to get to this reduced level of funding would include:

 

  •  Eliminate K-8 Instructional Specialist position at a cost of $ 50,000
  • Reduce athletic expenses and/or increase user fees by $ 40,000
  • Eliminate 6.3 FTE support staff positions at a cost of $120,000
  • Eliminate 3.7 FTE teaching positions at a cost of $175,000

 

These reductions would have a significant impact on our students including elimination of athletics programs (e.g., elimination of freshman sports), reduced instructional support in classrooms, and an increase in class size, most likely in grades 3-5 and course sections in grades 9-12. The 3.7 FTE reductions in teaching positions may increase or decrease based upon kindergarten enrollment, which will become more solidified by early spring. We are currently assuming the same kindergarten staffing levels as FY11.

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